VANCOUVER, March 21, 2018 /CNW/ - American Hotel Income
Properties REIT LP ("AHIP") (TSX: HOT.UN, HOT.U and HOT.DB.U) is pleased to announce that it has consolidated the debt and
business structure of its Economy Lodging hotel portfolio to provide it with improved operating and tax efficiencies. AHIP has
refinanced its Railway Portfolio Term Loan of approximately US$19.0 million and obtained a
US$4.0 million mortgage for two of its recently acquired hotel properties – the Days Inn
hotel in Fargo, ND and the Baymont Inn & Suites in Whitefish,
MT, through its existing syndicate of U.S. chartered banks. AHIP has also increased its secured revolving line of credit
to US$13.5 million to provide increased flexibility to pursue opportunistic, accretive tuck-in
acquisitions, and for upcoming renovations as part of the Wyndham rebranding.
Key financing highlights:
- The new Railway Portfolio Term Loan has a seven-year term with an interest rate of LIBOR + 280 basis points and matures in
March 2025.
- The Fargo and Whitefish mortgage has a five-year term
with an interest rate of LIBOR + 280 basis points and matures in March 2023.
- The revolving line of credit was increased from US$10.0 million to US$13.5 million with an interest rate of LIBOR + 280 basis points and matures in March
2019.
- Economy Lodging hotel loans now total approximately US$110 million in aggregate with this
syndicate of lenders. The consolidation of loans through this syndicate will simplify operating processes for AHIP and generate
annual income tax savings.
"The refinancing of loans for our Economy Lodging hotel portfolio highlights the confidence of AHIP's lenders in our balance
sheet and the growth opportunities within our Economy Lodging business," said Rob O'Neill, CEO,
AHIP. "While we expect 2018 will be a year of continued hotel integration and optimization of the 23 premium-branded hotels
we acquired in 2017, we continue to find opportunities to add complementary hotel properties to our portfolio. Our increased line
of credit will provide us with more flexibility to pursue opportunistic and accretive tuck-in acquisitions, should the right
opportunities arise."
"AHIP remains focused on executing its strategy of providing investors with a reliable and stable U.S. dollar
denominated distribution," said Ian McAuley, President, AHIP. "The addition of these
loans for our Economy Lodging portfolio complements the long-term, fixed-rate debt for our Premium Branded hotel portfolio –
which has an average interest rate of 4.6% and comprises 85% of our total debt. In total, 97% of our debt is fixed-rate with an
average term remaining of more than seven years and no significant loan maturities until June 2022,
positioning AHIP well for any near-term interest rate changes."
ABOUT AMERICAN HOTEL INCOME PROPERTIES REIT LP
American Hotel Income Properties REIT LP (TSX: HOT.UN; HOT.U and HOT.DB.U), or AHIP, is a limited partnership formed to invest
in hotel real estate properties located substantially in the United States. AHIP currently has
115 hotels, and is actively engaged in growing its portfolio of premium branded, select-service hotels in larger secondary
markets that have diverse and stable demand. AHIP hotels operate under brands affiliated with Marriott, Hilton, IHG, Wyndham and
Choice Hotels through license agreements. The company's long-term objectives are to build on its proven track record of
successful investment, deliver reliable and consistent U.S. dollar denominated distributions to unitholders, and generate value
through the continued growth of its diversified hotel portfolio. More information is available at www.ahipreit.com.
FORWARD-LOOKING INFORMATION
Certain statements in this news release may constitute "forward-looking" information that involves known and unknown risks,
uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be
materially different from any future results, performance or achievements or industry results expressed or implied by such
forward-looking information. Forward-looking information generally can be identified by the use of terms and phrases such as
"anticipate", "believe", "could", "estimate", "expect", "feel", "intend", "may", "plan", "predict", "project", "subject to",
"will", "would", and similar terms and phrases, including references to assumptions. Some of the specific forward-looking
statements in this news release include, but are not limited to, statements with respect to: enhancing AHIP's liquidity and
credit-worthiness; the ability to complete accretive acquisitions; the realization of operating and tax efficiencies; upcoming
renovations as part of the Wyndham rebranding; and AHIP's long-term objectives.
Forward-looking information is based on a number of key expectations and assumptions made by AHIP, including, without
limitation: a reasonably stable North American economy and stock market; the continued strength of the U.S. lodging industry;
capital markets providing AHIP with readily available access to equity and/or debt financing on terms acceptable to AHIP; the
accuracy of third party reports with respect to lodging industry data; and the value of the U.S. dollar. Although the
forward-looking information contained in this news release is based on what AHIP's management believes to be reasonable
assumptions, AHIP cannot assure investors that actual results will be consistent with such information.
Forward-looking statements are provided for the purpose of presenting information about management's current expectations and
plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes.
Forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future performance
or results. Those risks and uncertainties include, among other things, risks related to: general economic conditions; future
growth potential; AHIP's unit prices; liquidity; tax risk; tax laws currently in effect remaining unchanged; ability to access
capital markets; competition for real property investments; environmental matters; the value of the U.S. dollar; and changes in
legislation or regulations. Management believes that the expectations reflected in forward-looking statements are based upon
reasonable assumptions and information currently available; however, management can give no assurance that actual results will be
consistent with these forward-looking statements. Additional information about risks and uncertainties is contained in AHIP's
MD&A dated March 6, 2018 and annual information form for the year ended December 31, 2016, copies of which are available on SEDAR at www.sedar.com.
The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement.
Forward-looking information reflects management's current beliefs and is based on information currently available to AHIP. The
forward-looking information is made as of the date of this news release and AHIP assumes no obligation to update or revise such
information to reflect new events or circumstances, except as may be required by applicable law.
SOURCE American Hotel Income Properties REIT LP
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